The Japanese yen declined in Asian markets on Friday, resuming its losses after a two-day pause against the US dollar, edging closer once again to its lowest level in two weeks. The currency is now on track for its largest weekly loss in 2025, amid escalating chaos in global trade as Donald Trump announced further tariffs.

Despite rising expectations of a rate hike by the Bank of Japan at its late-July meeting, markets remain focused on upcoming key economic data from Tokyo, including figures on inflation, wages, and unemployment in the world's third-largest economy.

The Price

- Yen exchange rate today: The dollar rose by 0.55% against the yen to ¥147.04, up from the opening rate of ¥146.23, after hitting a low of ¥146.13.

- On Thursday, the yen posted a marginal gain of less than 0.1% against the dollar, marking its second consecutive daily gain as part of a rebound from its two-week low at ¥147.18.

Weekly Performance

Over the course of this week—which officially concludes at Friday’s settlement—the yen is currently down about 1.75% against the US dollar, putting it on track for its steepest weekly decline of 2025.

Trade Turmoil

Global trade turbulence has intensified after US President Donald Trump announced a new wave of tariffs, stating his intention to impose broad 15% to 20% tariffs on most of America’s trading partners.

Trump announced a 35% tariff on goods imported from Canada. In a message posted on Truth Social, he informed Canadian Prime Minister Mark Carney that the new tariffs would take effect on August 1 and would increase further if Canada retaliated.

Trump also stated on Thursday that the European Union may receive a formal tariff letter by Friday, raising doubts about the progress of trade talks between Washington and the EU.

Brazilian President Luiz Inácio Lula da Silva said he hopes to find a diplomatic solution to Trump’s threat of a 50% tariff on Brazilian imports, but vowed to respond in kind if the tariffs go into effect on August 1.

Comments and Analysis

- Francesco Pesole, FX strategist at ING Bank, said markets are still digesting the recent tariff surprises, but there’s hesitation in trying to predict Trump’s next move.

- Pesole added: “I believe the general consensus still holds that Trump won’t impose new tariffs on China and will likely reach an agreement with the European Union.”

Japanese Interest Rates

- Last week’s data from Tokyo showed household spending in Japan rose by 4.7% year-on-year in May, marking the fastest pace since August 2022. The result far exceeded market expectations of a 1.3% rise, after a 0.1% decline in April.

- Following the data, market pricing for a potential 25-basis-point rate hike by the Bank of Japan in July increased from 40% to 45%.

- To reassess those odds, investors are now awaiting further data on inflation, unemployment, and wage growth in Japan.

The Australian dollar climbed against most major currencies on Thursday after markets absorbed the central bank’s latest monetary policy decision.

In a statement released early Tuesday, the Reserve Bank of Australia said it had decided to leave its benchmark interest rate unchanged, noting that it “needs more information to ensure inflation is steadily moving toward the 2.5% target.”

In the press conference following the meeting, Governor Michele Bullock said it was appropriate to adopt “a cautious and gradual approach to monetary easing,” but added that the bank could foresee further rate cuts if inflation slows as expected.

The decision came as a surprise, as markets had largely priced in a rate cut, prompting the Australian dollar to recover after losing nearly 1% on Monday.

As of 20:48 GMT, the Australian dollar rose 0.8% against the US dollar to 0.6588.

Canadian Dollar

The Canadian dollar also edged higher, rising 0.1% versus the greenback to 0.7316 by 20:48 GMT.

US Dollar

The US dollar index climbed 0.1% to 97.6 points by 19:40 GMT, after hitting a high of 97.9 and a low of 97.2 during the session.

President Trump announced Wednesday evening that a 50% tariff on imported copper would take effect on August 1.

He also imposed a 50% tariff on imports from Brazil, partially in response to the trial of former Brazilian President Jair Bolsonaro for his alleged role in attempting to overturn the results of the 2022 election.

Trump added that the decision was also due to what he described as a “very unfair trade relationship” with Brazil, calling it “far from reciprocal treatment.”

For his part, Brazilian President Luiz Inácio Lula da Silva said his country would respond to the US’s 50% tariffs in line with the principles of reciprocal economic treatment.

Government data released today showed that initial jobless claims in the US fell by 5,000 to 227,000 in the week ending July 5, while analysts had expected an increase to 235,000.

Bitcoin reached a new all-time high on Thursday, driven by growing demand from institutional investors and supportive policies adopted by the U.S. administration under President Donald Trump toward digital currencies.

The world’s largest cryptocurrency surged to a record level of $112,743.49, and was recently trading 1.7% higher at $112,621.63.

Anthony Pompliano, founder and CEO of Professional Capital Management, told investors in a Wednesday note: “Bitcoin is the only asset that becomes less risky the larger it gets.” He added: “In the past, most large asset managers couldn't gain exposure to Bitcoin when its market cap was between $100 and $200 billion. But now, with its value in the trillions, virtually every major asset manager in the world can allocate to it.”

Trump's Policies Support the Crypto Sector

Supportive policies from the Trump administration have boosted investor confidence and unlocked fresh capital flows into the crypto space.

For instance, Trump Media & Technology Group (DJT.O), operated by the Trump family, is seeking approval to launch a new ETF that would invest in a range of cryptocurrencies, including Bitcoin, Ethereum, Solana, and Ripple, according to a filing submitted this week to the U.S. Securities and Exchange Commission.

Rally Extends to Other Cryptos and Crypto Stocks

The surge in Bitcoin extended to other digital assets as well:

Ethereum, the second-largest cryptocurrency by market cap, climbed to a one-month high of $2,794.95 and was last up 5.4% at $2,740.99.

The rally also lifted shares of crypto-linked companies:

MicroStrategy Inc. (MSTR.O), co-founded by Bitcoin advocate Michael Saylor, rose 4.7% to $415.41.

Coinbase Global (COIN.O) gained 5.4% to reach $373.85.

Public Companies Add Bitcoin to Their Treasuries

While some investors have started taking profits, several publicly listed firms — including Trump Media and GameStop — recently announced plans to purchase Bitcoin and add it to their corporate reserves.

One analyst told MarketWatch: “It’s turning into a race to see who can accumulate the most purchasing power.”

Economic and Trade Risks May Shape the Rally’s Future

Sid Powell, CEO and co-founder of Maple Asset Management, believes the continuation of the rally will largely depend on macroeconomic conditions and progress in trade negotiations.

He stated: “If trade talks stumble as we near the August 1 deadline set by President Trump, Bitcoin could face additional pressure.” However, if progress is made on trade deals and inflation data comes in soft — prompting the Federal Reserve to resume rate cuts — that could further support Bitcoin’s climb.

Powell also noted that Wednesday’s Bitcoin jump was driven by a “risk-on” sentiment, after minutes from the Federal Reserve showed most policymakers anticipate rate cuts later this year.

Copper prices rose on Thursday despite a stronger U.S. dollar, as markets digested the implications of President Donald Trump’s newly announced tariffs on copper imports.

Trump’s announcement of a 50% tariff on copper imports drove domestic prices to record highs. However, analysts expect prices to gradually decline over the coming months as traders offload large stockpiles accumulated in anticipation of the measure.

The tariff follows a U.S. Commerce Department investigation launched in February, which had initially anticipated duties around 25%. The mere expectation of tariffs had already driven copper prices on the COMEX up by 25% between January and Monday.

Trump’s announcement on Tuesday sent COMEX copper prices to a record $5.6820 per pound, or $12,526 per metric ton—more than $2,920 above the benchmark price on the London Metal Exchange (LME), currently around $9,600 per ton.

Expected Price Decline as U.S. Demand Weakens

According to Panmure Liberum analyst Tom Price, “Once the Trump tariff noise settles, we expect U.S. copper prices to fall closer to global levels as domestic consumption is delayed.”

Price expects U.S. copper demand to drop 16% this year to 1.32 million tons due to tariff-related uncertainty and broader economic slowdown. U.S. manufacturing data—key to copper consumption—suggest the sector is in contraction.

Massive U.S. Inventory Surplus

Analysis by Macquarie, using trade data from January to May and shipping figures for June, estimates U.S. copper imports at 881,000 metric tons in H1 2025, compared to actual demand of only 441,000 tons.

This implies a surplus of 440,000 tons—107,000 tons stored visibly on COMEX and 333,000 tons in undisclosed or industrial supply chain stockpiles.

U.S. Inventories Soar While LME Stocks Fall

COMEX copper inventories reached 201,203 metric tons as of July 7, more than doubling since late March. In contrast, LME copper stocks fell 66% since mid-February, hitting just 90,000 tons in late June—their lowest since August 2023.

Some of the surplus is held in U.S. foreign trade zones, allowing easier re-export since it hasn’t cleared customs. COMEX inventories that have cleared customs would be harder to export but not impossible.

Duncan Hobbs of Concord Resources noted: “There’s nothing to prevent re-export of customs-cleared copper... but it would need a financial incentive like a fall in the COMEX premium.”

Tariff Exemptions May Narrow COMEX Premium

The possibility of exemptions could also weigh on U.S. copper prices. Industry sources suggest countries like Chile may be excluded from the tariff.

Chile accounted for 70% of U.S. copper imports in 2023—about 646,000 tons—and the U.S. runs a trade surplus with the country, politically easing a potential exemption.

Citi analysts, including Tom Mulqueen, expect Canada, Chile, and Mexico may ultimately face reduced tariffs around 25%, being considered “key partners.”

Traders Face Hurdles Unloading High-Cost Copper

Traders who rushed to stockpile copper now hold some of the priciest inventory globally, which may be difficult to sell unless the U.S. market maintains its high premium.

Meanwhile, at 16:23 GMT, the U.S. dollar index was up 0.2% at 97.7, with a high of 97.9 and low of 97.2.

Copper futures for September delivery rose 2.3% to $5.61 per pound by 16:16 GMT.